He\’s been arguing for years, has our retired accountant from Wandsworth, that bonds are the way to go. People should invest in retail bonds so that they\’re investing in real assets, not just the omney swapping of The City. Better for investors and better for the economy he says.
All of which may or may not be true. However, his point has been that the government has to do something, that action must be taken this day to make it so.
National Grid raised £260m through the process – the largest amount raised through a retail offering. The bond, linked to the retail price index (RPI), offers a coupon of 1.25pc over 10 years.
Malcolm Cooper, global tax and treasury director at National Grid, said: \”This has clearly exceeded our expectations and we are extremely pleased about the total amount raised. This shows that there is demand for inflation-linked products from a business such as National Grid.\”
Retail bonds have become more popular in recent years, even though they are more risky than bank accounts because they are not covered by depositor guarantee schemes in case of default by the issuer.
However, savers are looking for new places to put their money as interest rates remain low.
Royal Bank of Scotland last year launched a retail bond with an interest rate of 3.9pc, or RPI – whichever is higher. There is currently not a single savings account available that beats RPI at 5.2pc.
The thing is, we don\’t need a change in the law, we don\’t need action this day. For the bit that Mr. Murphy forgot is that such bonds can already be issued. And as you can see, such bonds are in fact issued.
Which I\’m sure will grate enormously. For, unkind though it may be to say so, my suspicion is that it\’s more important that R. Murphy gets to tell people what to do and they do it than what it is that people actually do.
Do you think Murphy could actually solve an Ordinary Differential Equation? I don’t mean that being able to do so is particularly germane to this story, but simply the level of mathematical nous required would act as a sort of pons asinorum. We know he disdains economics; it would be interesting to know if he’s any good at calculus.
Tim, I doubt your thesis. RM will not be affected at all by the actual existence of such bonds. As he himself says, none are so blind as those that refuse to see.